Annex II to the Open Call for Expression of Interest to ... · 2. Category B of Final Recipients: facilitating the skills transformation efforts pursued by the European enterprises

Annex II to the Open Call for Expression of Interest to select Financial Intermediaries under the

Skills & Education Guarantee Pilot

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Capped Direct1

Guarantee under the


Indicative Term Sheet

Important Disclaimer

This summary term sheet is for information purposes only. This document is an outline of the

principal terms and conditions for the product described herein, which are non-exhaustive and

subject to change.

The financial intermediaries are requested to take note that any application for a (Counter-)

guarantee under the S&E Guarantee Pilot will be treated after finalisation of the EIF governance

approval process. Should any terms of this Call change, the relevant update will be published on

EIF website and EIF will inform the applicants accordingly.

This document is intended to provide a basis for discussions and does not constitute a

recommendation, a solicitation, an offer or a binding commitment – either implicit or explicit – on

the part of the European Investment Fund (“EIF” or the “Relevant Entity”) and/or any other person

to enter into one or more transaction(s). Any finance commitment by the Relevant Entity can only be

made, inter alia, after appropriate approval, conclusion of legal due diligence and finalisation of

the required legal documentation. The Relevant Entity does not act as adviser to you or owe you any

fiduciary duty. The Relevant Entity does not make any representations or warranties (whether explicitly

or implicitly) with respect to the information contained in this document.

Overview of the Capped Direct Guarantee

The credit risk protection shall be provided through a Guarantee which shall be issued by EIF (the

‘’Guarantor’’) acting on behalf of the European Commission for the benefit of a selected financial

intermediary (the “Financial Intermediary”) complying with the criteria set out herein.

It shall partly cover the credit risk associated with eligible Debt Financing granted to eligible final

recipients (“Final Recipient Transactions”) included in the Individual Portfolio.

1 The terms outlined in this term sheet will apply mutatis mutandis to counter-guarantees. Due to the specifics of counter-guarantees, some additional

requirements or adaptations of the terms of this direct guarantee term sheet (including in relation to the eligibility criteria and requirements applicable at the

level of the Financial Sub-Intermediaries) will be added to the counter-guarantee agreement.



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For the purpose of alignment of interest, the Financial Intermediary will have to retain at any time a

minimum 20% exposure to the outstanding aggregate principal amount of every Final Recipient

Transaction included in the Individual Portfolio.

The guarantee is subject to a cap amount (the “Guarantee Cap Amount”).

The guarantee shall constitute a financial guarantee and shall cover losses (as described below)

incurred by the Financial Intermediary in respect of the guaranteed part of each defaulted eligible

Final Recipient Transaction up to the Cap Amount (the “Guarantee”).

The capped Guarantee will be provided by EIF free of charge to the Financial Intermediary.

The origination, due diligence, documentation and servicing of the Final Recipient Transactions shall

be performed by the Financial Intermediary in accordance with its standard origination and servicing

procedures. In this context, the Financial Intermediary shall retain the direct client credit relationship

for each Final Recipient Transaction (according to pre-defined eligibility criteria on a transaction-by-

transaction and portfolio basis), which will be automatically covered, by way of submitting inclusion

notices to the EIF on a quarterly basis until the end of the relevant Inclusion Period (as defined below).

Complementarity with other financial instruments

Financial Instruments providing liquidity: The guarantees provided under the S&E Pilot will

provide partial credit risk protection for a portfolio of Final Recipient Transactions. If Financial

Intermediaries deem it necessary and if available to them, e.g. through national or regional

programmes or through other institutions, they may combine the credit risk protection provided

under the S&E Pilot with pure liquidity financial instruments supported through other sources

(e.g. supplementary EIB global loans which would bring the potential to gain access to cheaper

funding and pass on a lower interest rate to Final Recipients through a reduction of the funding

margin). The complementarity of the S&E Pilot to such other Support schemes will be assessed

by EIF based on information provided by the Applicant.



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Indicative terms of the Direct Guarantee

EU Policy

Objective

The S&E Pilot aims at:

1. Category A of Final Recipients: supporting individuals in education attainment

and skills upgrade by unlocking access to finance to cover educational / skills gap

in Europe resulting from – inter alia - societal and technological transformation of

the European economy; S&E Pilot will also support students and learners pursuing

educational programmes in a different Member State other than the one of residency

of the individual (mobility);

2. Category B of Final Recipients: facilitating the skills transformation efforts pursued

by the European enterprises by providing risk finance for improving the skills and

skills utilisation of their workforce’s skill set, thereby contributing to the increase of

an enterprise’s competiveness and productivity while achieving job preservation of

the employed;

3. Category C of Final Recipients: enhancing access to finance to European

organisations active in the field of skills, training and education or developing

projects in education field with the objective of significantly improving the ecosystem

of the supply of education, training and skills-related services.

Structure of the

Portfolio

Guarantee

First Loss Portfolio Guarantee providing partial credit risk coverage on a

transaction-by-transaction basis for the creation of a portfolio of eligible Final

Recipient Transactions. The Guarantee, provided by EIF but financed by the

European Union under the European Fund for Strategic Investments, shall cover

Losses incurred by the Financial Intermediary at the Guarantee Rate subject to the

Guarantee Cap Rate. Losses are covered up to the Cap Amount stipulated in the

guarantee agreement (the “Guarantee Agreement”) between EIF and the relevant

Financial Intermediary. No penalty applies to the Financial Intermediary if the

Losses exceed the Cap Amount. The maximum term of the Guarantee will be 15

years for Final Recipient Transactions under Category A and 10 years for Final

Recipient Transactions under Categories B and C.

For the avoidance of doubt, Final Recipient Transactions might have longer

maturities than the ones specified above.

An indicative outline of all the actors concerned by the guarantee mechanism is

set-out below:



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An indicative chart of the guarantee mechanism is set-out below:

Participating

Countries

As at the date of this Call for Expression of Interest, as amended from time to time,

the countries covered by the S&E Pilot comprise the EU Member States in line with

the EFSI country coverage.

Governing Law

and Language

The terms of the Guarantee Agreement shall be in the English language and the

Guarantee Agreement shall be governed by the laws of Luxembourg.

Guarantee

Currency

The Guarantee shall be expressed in the Base Currency. All amounts and payments

made under the Guarantee Agreement by and to the EIF shall be in the Base

Currency. If a Final Recipient Transaction is denominated in a currency other than

the Base Currency, or a Loss has been incurred in a currency other than the Base

Currency, or a Recovery is in a currency other than the Base Currency, the

guarantee agreement will specify the applicable FX mechanism.

Base Currency The Final Recipient Transactions can be denominated in EUR or certain other

currencies. If the Portfolio consists mainly of Final Recipient Transactions

Guarantee Rate (GR) of 80%

on individual transaction basis

Guarantee Cap

Rate (GCR)

Up to 25%

Risk retained by the

Financial Intermediary



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denominated in currencies other than EUR, one of such non-EUR currency may be

designated as the Base Currency.

Individual Portfolio The portfolio of Final Recipient Transactions originated by a Financial Intermediary

and covered by the Guarantee.

Availability

Period

A period until the end of which the relevant Financial Intermediary may approve

Final Recipient Transactions.

Inclusion Period A period starting on the same date as the Availability Period and ending on the day

falling 6 months after the end of the Availability Period. During this period, Final

Recipient Transactions may be included in the Individual Portfolio, provided that

such transactions were approved before the end of the Availability Period and have

been at least partially disbursed before the end of the Inclusion Period.

The inclusion of Final Recipient Transactions shall occur automatically upon receipt

by EIF of an inclusion notice submitted by the Financial Intermediary on a quarterly

basis. For the avoidance of doubt, the Final Recipient Transaction so included shall

be covered by the Guarantee from the date on which such Final Recipient

Transactions have been entered into.

Maximum Portfolio

Volume

The maximum aggregate amount of principal of Final Recipient Transactions to be

included in the Individual Portfolio, as agreed in the Guarantee Agreement. The

Maximum Guaranteed Portfolio Volume shall be denominated in the Base

Currency.

Actual Portfolio

Volume

Expressed in the Base Currency, the aggregate amount of principal (excluding

capitalised interest) committed to be made available under newly originated Final

Recipient Transactions included in the Individual Portfolio from time to time.

Guarantee cover /

Losses

The Guarantee shall cover Losses, at the Guarantee Rate, subject to the Guarantee

Cap Rate (i.e. up to the Cap Amount), incurred by the Financial Intermediary.

Losses mean:

any principal and interest amounts accrued (excluding (i) late payment or default

interests, capitalised interests (other than for Permitted Capitalized Interests), bank

fees and any other costs and expenses and (ii) any interest amounts which accrued

after a period of 90 calendar days from the last payment due), due to the Financial

Intermediary, payable and outstanding), to the Financial Intermediary under the

terms of the covered Final Recipient Transaction following the occurrence of specific

credit events.

The above will be adapted, as necessary, to address the specificities of the products

covered under the Guarantee Agreement with the relevant Financial Intermediary.

Guarantee

Cap Rate

The percentage of the portion of the Actual Portfolio Volume covered by the

Guarantee. It shall be up to 25%.

Guarantee

Rate

The Guarantee Rate shall be up to 80% of each Final Recipient Transaction covered

by the Guarantee and will be typically set at its maximum.

Cap Amount An amount, expressed in the Base Currency, set in the Guarantee Agreement, at

which the obligation to pay under the Guarantee is capped, which is the maximum

liability under the Guarantee and is calculated at Financial Intermediary level as

the product of the (i) Actual Portfolio Volume, (ii) the Guarantee Rate, and (iii) the

Guarantee Cap Rate.

Events of Default

under the

Guarantee

The Guarantee Agreement contains certain standard events of default related to

the Financial Intermediary, including non-payment, breach of obligation,

insolvency, Sanctions, unlawfulness and misrepresentation.

The occurrence of an event of default, if it has not been remedied within the

relevant grace period (if any), may result in the early termination of the Guarantee



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Agreement (such event, an “Early Termination”).

Guarantee

Termination Date

The Guarantee shall terminate on the earlier of: (i) seventeenth anniversary for

Category A or twelfth for Categories B and C of the end of the Inclusion Period; (ii)

the date on which an Early Termination (if any) has occurred, (iii) the date (if any)

on which the EIF is no longer liable to effect further payments to the Financial

Intermediary and has no further claims under the Guarantee and (iv) 31 December

2039 for Category A or 31 December 2034 for Categories B and C.

Permitted Capitalized

Interests

Means, in respect of a Final Recipient Transaction that:

(1) during a grace period and/or the duration of an Eligible Educational

Programme; and/or

(2) for a maximum period of 12 months, in the context of such Final Recipient

Transaction being restructured such as:

(i) the amount of principal scheduled to be paid and/or any interest

amount due by the relevant Final Recipient is reduced in order to

improve the collectability of the claims arising from the relevant Final

Recipient Transaction, or

(ii) the maturity of the transaction is rescheduled, including inter alia by the

introduction of a grace period, in order to improve the collectability of

the claims arising from the relevant Final Recipient Transaction

The interest which is not paid during such periods may be capitalised as part of the

outstanding principal or interest amount of the Final Recipient Transaction for a

maximum period of twelve months.

For the avoidance of doubt, Permitted Capitalized Interests will not be taken into

account either in determining whether the maximum principal amount of the Final

Recipient Transaction complies with the Final Recipient Transaction Eligibility

Criteria or in determining the Actual Portfolio Volume.

Sanctioned Person Means any person who is a designated target of Sanctions or is otherwise a subject

of Sanctions.

Sanctions Means any restrictive measures adopted pursuant to Article 215 of the Treaty on

the Functioning of the European Union.

Termination of the

Guarantee

Upon termination of the Guarantee Agreement, EIF will initiate negotiations with

the Financial Intermediary to agree on the settlement of any outstanding rights and

liabilities based, inter alia, on an estimation of future Loss Recoveries (including,

for the avoidance of doubt, any Recoveries arising under the right of clawback)

and outstanding liabilities in relation to Losses in light of the respective Cap

Amount.

Guarantee Fee

Guarantee Fee The Guarantee is free of charge.

Eligibility Criteria



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Final

Recipient

Final Recipient is an individual or entity receiving support under a Final Recipient

Transaction, falling under the following 3 categories:

Category A: Students and/or Learners;

Category B: Enterprises investing in skills and skills utilisation of their

workforce; and

Category C: Organisations supplying education, training, skills and related

services (including kindergartens, nursery schools, early childhood services,

etc.).

Eligible

Educational

Programme

Means an education programme falling under the International Standard

Classification of Education (ISCED), classifications 3-8, including e-learning

programmes.

Educational Programmes under the ISCED2,3

Upper secondary

education, including

vocational

education and

training (VET)

programmes

ISCED 3

Post-secondary non-

tertiary education,

including vocational

education and

training (VET)

programmes

ISCED 4

Short-cycle tertiary

education, including

vocational

education and

training (VET)

programmes

ISCED 5

2 International Standard Classification of Education (ISCED).

3 The Structure of the European Education Systems 2018/19 – the report provides an overview of potentially eligible

educational programmes by relevant Member State of the EU – Financial Intermediaries should refer to the relevant

Country(-ies) list(s).

https://ec.europa.eu/eurostat/statistics-explained/index.php/International_Standard_Classification_of_Education_(ISCED)

https://ec.europa.eu/eurostat/statistics-explained/index.php/International_Standard_Classification_of_Education_(ISCED)

https://eacea.ec.europa.eu/national-policies/eurydice/content/structure-european-education-systems-201819-schematic-diagrams_en





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Bachelor’s or

equivalent level

degree

1st

cycle4

ISCED 6

Master’s or

equivalent level

degree

2nd

cycle2,3

ISCED 7

Doctoral or

equivalent level

degree

3rd

cycle2,3

ISCED 8

Plus the following three additional categories:

Programmes

leading to nationally

recognised

qualifications

Any programme leading to a qualification (other than

an educational programme falling under the

classifications 3-8 of the ISCED) included in

national/regional qualification frameworks (NQFs) of

participating countries.

Digital Skills Digital Skills meaning any skills related to digital

literacy, (e.g. the ability to find, evaluate, utilise, share,

create content and execute activities using information

technologies); digital skills programmes include, inter

alia, those digital skills programmes (in any form)

provided by a training center or association or

consultancy or equivalent (including chambers of

commerce, professional associations, etc).

Trainings in labour

market relevant

skills

Trainings in labour market relevant skills means

trainings providing professional skills and preparing

for entry into shortage occupations / occupations in

high demand as designated by competent national or

European authorities (e.g. EURES 5

, national public

employment services, national migration services). For

example, at European level, the list of such

occupations has been compiled by the European

Commission in the fields listed in the Column titled

“Shortage” in Table 1E on Page 6 of the document “A

4 As per the Framework for Qualifications of the European Higher Education Area dated May 2015.

5 https://ec.europa.eu/eures/public/en/homepage

https://ec.europa.eu/eures/public/en/homepage



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comparison of shortage and surplus occupations

based on analyses of data from the European Public

Employment Services and Labour Force Surveys”.6

Such trainings include, inter alia, labour market

relevant skills programmes (in any form) provided by

a training centre or association (including chambers

of commerce, professional associations, etc) or

consultancy or equivalent.

Eligible

Investment in

Skills

(A) Apprenticeships

Apprenticeships are learning programmes that

systematically combine work-based learning in

companies with learning based in education or

training institutions. They must lead to a nationally

recognised qualification and be arranged in a form of

a contract or formal agreement for a prescribed

period of time between the employer and the

apprentice and/or an institution representing the

apprentice, defining the characteristics of the

apprenticeship.

(B) Programmes

leading to nationally

recognised

qualifications

Any programme leading to a qualification (other than

an educational programme falling under the

classifications 3-8 of the ISCED) included in

national/regional qualification frameworks (NQFs) of

Participating Countries.

(C) Traineeships

Traineeships means a short-term job contract entered

into between an enterprise and a student or recently

graduated individual in which there is an explicit

component of training on the job.

(D) Student

Entrepreneurship

Student Entrepreneurship means the education

programmes (in any form including inter alia training,

traineeships, etc.) which include the acquisition of

entrepreneurial skills by a focus on business creation,

including – inter alia – the setting up or design or

simulation of an enterprise or project, provided by a

training center or association or equivalent.

(E) Digital Skills Digital Skills meaning any skills related to digital

literacy, (e.g. the ability to find, evaluate, utilise, share,

6 https://publications.europa.eu/en/publication-detail/-/publication/28a5c10c-48fc-11e8-be1d-

01aa75ed71a1/language-en

https://publications.europa.eu/en/publication-detail/-/publication/28a5c10c-48fc-11e8-be1d-01aa75ed71a1/language-en

https://publications.europa.eu/en/publication-detail/-/publication/28a5c10c-48fc-11e8-be1d-01aa75ed71a1/language-en



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create content and execute activities using information

technologies); digital skills programmes include, inter

alia, those digital skills programmes (in any form)

provided by a training centre or association or

consultancy or equivalent (including chambers of

commerce, professional associations, etc).

(F) Trainings/other

Skills acquisition

In house or external trainings for the workforce of the

Final Recipient.

Debt Financing Means any type of debt financing, including income sharing loans, income

contingent loans, deferred payment schemes, subordinated loans, participating

loans, convertible loans, finance leases and bank guarantees.

Final Recipient

Eligibility Criteria and

the Final Recipient

Transaction Eligibility

Criteria

The Eligibility Criteria shall comprise Final Recipient Eligibility Criteria and the Final

Recipient Transaction Eligibility Criteria.

Financial Intermediaries shall ensure that Final Recipient Transactions to be

included in the Individual Portfolio under the Guarantee Agreement shall comply

with the eligibility criteria set out below and any additional eligibility criteria set out

in the specific terms of the relevant Guarantee Agreement (collectively, the

“Eligibility Criteria”).

A breach of any of the Eligibility Criteria shall result in an exclusion of the relevant

Final Recipient Transaction(s) from the Individual Portfolio save as specified in the

“Exclusion Process”.

1. Final Recipient Eligibility Criteria

The Final Recipients under Final Recipient Transactions shall belong to one of the

categories below:

Category A

Final Recipients shall comply with each of the following eligibility criteria:

a. The Final Recipient is a natural person;

b. The Final Recipient undertakes an Eligible Educational

Programme or part of it in a Member State7

, which shall be

evidenced by means of a proof acceptance or enrolment in an

Eligible Educational Programme;

c. The Final Recipient provides a declaration indicating any

financial support received from other existing support schemes,

if any, and the total additional amount of financing needed,

which shall be kept on record by the Financial Intermediary;

7 For avoidance of doubt, an Eligible Education Programme in the form of e-learning shall also be eligible irrespective of

the location of the e-learning provider.



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d. The Final Recipient is not a Sanctioned Person;

Category B

Final Recipients shall comply with each of the following eligibility criteria:

a. The Final Recipient is established and operating in a Member

State;

b. The Final Recipient is an SME, a Small Mid Cap or Small Public

Enterprise;

c. The Final Recipient intends to finance an Eligible Investment in

Skills, which shall be evidenced by means of a presentation of

a training plan, training budget or offer by a training provider

or any similar relevant document;

d. The Final Recipient is not established in a Non-Compliant

Jurisdiction unless in case of NCJ Implementation;

e. The Final Recipient is not a Sanctioned Person;

Category C

Final Recipients shall comply with the following eligibility criteria:

a. The Final Recipient is an SME, a Small Mid cap, a Small Public

Enterprise or an Organisation (or association thereof);

b. The Final Recipient is:

a newly established8

enterprise or organisation with an

economic activity in the field of education/skills (NACE

code in group P9

); or

an existing enterprise or organisation with a substantial

focus10

of their economic activity in the field of

education/skills (NACE code in group P); or

entering into a Final Recipient Transaction for the purpose

of developing a skills/training/educational project that falls

under one of the NACE codes of group P11

(Education),

which shall be evidenced by means of the provision of the

project plan or equivalent documentation;

c. The Final Recipient is established and operating in a Member

8 Up to two years since establishment date

9 At the four-digit statistical class level as listed in Annex I

10 At least 20% of the sales/turnover to derive from an economic activity in the field of education/skills

11 See Annex I



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State;

d. The Final Recipient is not established in a Non-Compliant

Jurisdiction unless in case of NCJ Implementation;

e. The Final Recipient is not a Sanctioned Person.

2. Final Recipient Transaction Eligibility Criteria

Final Recipient Transactions shall comply with: (1) a set of common eligibility

criteria and (2) specific eligibility criteria as per the Final Recipient category:

(1) Common Eligibility Criteria:

a. The Final Recipient Transaction is newly originated and is entered

into with the Financial Intermediary during the Inclusion Period;

b. The Final Recipient Transaction shall not be affected by an

Irregularity or fraud;

c. The Final Recipient Transaction shall not finance illegal activities

according to applicable legislation in the country of the Financial

Intermediary or the Final Recipient (including national, European

Union and international legislation, including the Charter of

Fundamental Rights of the European Union and the European

Convention on Human Rights and its Supplementary Protocols);

d. The Final Recipient Transaction shall be denominated in EUR or any

other currency specified in the Guarantee Agreement;

e. If the Final Recipient Transaction is a lease, it shall be in the form

of a Finance Lease.

(2) Specific Eligibility criteria per category of Final Recipients:

Category A

a. The Final Recipient Transaction is a Debt Financing transaction,

which shall have a fixed repayment schedule;

b. The Final Recipient Transaction provides funding for coverage of

cost for tuition fees, living expenses, accommodation fees,

transport expenses, text books and other related expenses to an

Eligible Educational Programme, which shall be evidenced by

means of a proof of acceptance in an Eligible Educational

Programme;

c. The principal amount of a Final Recipient Transaction shall not be

more than EUR 30,000 or, where the Final Recipient Transaction

is denominated in a currency other than Euro, the equivalent

amount set out in the Guarantee Agreement. The Final Recipient

Transaction shall not raise the aggregate amount of principal

committed by the Financial Intermediary to be available for

utilisation by a single Final Recipient under one or more Final

Recipient Transactions above EUR 30,000 or, where the Final

Recipient Transactions are denominated in a currency other than

Euro, the equivalent amount set out in the Guarantee Agreement;

d. No collateral or parental (or other third party) guarantee shall be

requested to secure a Final Recipient Transaction other than a



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personal guarantee from the Final Recipient;

e. The Final Recipient Transaction shall not be eligible, if the Financial

Intermediary has entered into a guarantee agreement with the

Guarantor under the Erasmus+ Student Loan Guarantee Facility

(“Erasmus+ SLGF”) and if the Final Recipient Transaction is

eligible to be included in the Erasmus+ SLGF portfolio.

Category B


which shall have a fixed repayment Schedule or be a Revolving

Transaction;

b. The Final Recipient Transaction provides funding for investment in

intangible assets and working capital in Eligible Investment in Skills,

which shall be evidenced by means of a presentation of a training

plan or training budget or any equivalent document describing the

activities undertaken and its estimated cost;

c. The principal amount of each Final Recipient Transaction shall not

be more than EUR 2,000,000 or, where the Final Recipient

Transaction is denominated in a currency other than Euro, the

equivalent amount set out in the Guarantee Agreement;

d. The principal amount12

of a Final Recipient Transaction shall not

be higher than twice the amount of the direct planned costs13

related to the Eligible Investment in Skills, as shall be evidenced in

the relevant documentation (e.g. training plan, training budget,

offer by a training provider, etc.);

e. The Final Recipient Transaction shall have a minimum scheduled

maturity of 12 months;

f. In respect of Final Recipient Transactions in the form of Revolving

Transactions only, has a Maximum scheduled maturity of 9 years

(unless such scheduled maturity is extended as a result of a

conversion of the relevant Revolving Transaction.

Category C


which shall have a fixed repayment Schedule or be a Revolving

Transaction;

b. The Final Recipient Transaction provides funding for investment in

tangible and intangible assets, as well as working capital;

c. The principal amount of each Final Recipient Transaction shall not

be more than EUR 2,000,000 or, where the Final Recipient

Transaction is denominated in a currency other than Euro, the

equivalent amount set out in the Guarantee Agreement;

d. The Final Recipient Transaction shall have a minimum scheduled

12

In this amount any costs related to projects aiming to enhance skills demand or skills use may also be captured.

13 Direct planned costs for training may include fees, travel & subsistence costs, labour costs (salaries paid to apprentices

and trainees, as may be required by national legislation) of internal trainers & staff, costs of training materials and costs

of training premises.



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maturity of 12 months. e. In respect of Final Recipient Transactions in the form of Revolving

Transactions only, has a Maximum scheduled maturity of 9 years

(unless such scheduled maturity is extended as a result of a

conversion of the relevant Revolving Transaction).

Exclusion

Process

(i) At any time, the EIF may verify whether a Final Recipient Transaction

included in the Individual Portfolio is an eligible Final Recipient Transaction

and whether its inclusion in the Individual Portfolio is in compliance with

the terms of the Guarantee Agreement. At any time upon becoming aware

of the same, the EIF may notify the Financial Intermediary by sending an

Exclusion Notice identifying such non-eligible Final Recipient Transaction.

(ii) If a Financial Intermediary becomes aware of the same the Financial

Intermediary shall include such information in the immediately following

Report delivered to the EIF.

In each of the cases (i) and (ii) the Final Recipient Transaction shall be excluded

from the Individual Portfolio (and shall not be covered by the Guarantee)

(“Excluded Final Recipient Transaction”) as of the date on which it became a non-

eligible Final Recipient Transaction.

However, if a Final Recipient Transaction included in the Individual Portfolio is or

becomes a non-eligible Final Recipient Transaction, as a result of any event or

circumstance beyond the control of the Financial Intermediary after a payment

demand relating to such Final Recipient Transaction, then such Final Recipient

Transaction shall be deemed to be covered by the Guarantee.

Similarly, if a Final Recipient Transaction included in the Individual Portfolio

becomes a non-eligible Final Recipient Transaction, as a result of any event or

circumstance beyond the control of the Financial Intermediary but before a

payment demand relating to the Final Recipient Transaction, then such Final

Recipient Transaction shall be deemed to be covered by the Guarantee if the

Financial Intermediary procures that all amounts owed by the relevant Final

Recipient under such Final Recipient Transaction are accelerated or such Final

Recipient Transaction is otherwise terminated no later than the Report Date

immediately following the date on which it became aware of the same. However,

if the Financial Intermediary does not proceed to the acceleration of such Final

Recipient Transaction within the timeframe specified above then such Final

Recipient Transaction shall be excluded from the Individual Portfolio as of the date

on which it became a non-eligible Final Recipient Transaction.

The Actual Portfolio Volume shall be reduced following an exclusion from the

Individual Portfolio by the aggregate committed principal amount of the Final

Recipient Transactions so excluded.

Right of

Clawback

EIF will be entitled to be repaid by the Financial Intermediary certain amounts in

specified circumstances, including any amounts paid under the Guarantee by EIF

in excess of the Loss, in excess of the Cap Amount, and any excess amount paid

by EIF as a result of an exclusion of a Final Recipient Transaction from the Individual

Portfolio.



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Miscellaneous

Servicing and

Recoveries

The Financial Intermediary shall service the Individual Portfolio in accordance with

its internal guidelines and procedures.

Recoveries mean each and every amount, net of recovery and foreclosure costs (if

any), recovered or received by the Financial Intermediary in respect of a Loss for

which a valid Payment Demand has been sent to EIF. Recoveries shall be shared

between the Financial Intermediary and the EIF pro rata to the Guarantee Rate.

The EIF’s claims will rank pari-passu with the Financial Intermediary’s claims with

regard to any Loss Recoveries, subject to the fixed recovery rate (if applicable).

Reporting Financial Intermediaries shall provide EIF, within one calendar month after the end

of each calendar quarter (the ‘Report Date’), with information in a standardized

form, including among others, information on the Final Recipient Transactions

included in the Individual Portfolio and Final Recipients (the ‘Report’), as per

specific schedule to the Guarantee Agreement.

Other

information

Financial Intermediaries may also be requested to provide, from time to time,

further information related to the Final Recipients covered by the Guarantee in the

context of programme evaluations and other reports. This information is required

by the European Commission for reporting purposes and will be used for

evaluating the S&E Pilot. The European Commission requests will be coordinated

by the EIF.

In addition to the evaluations described above, the European Commission may

perform a Final Recipient Survey contacting directly or via a contractor a sample

of Final Recipients. For this purpose, the contractual documentation between the

Financial Intermediary and the Final Recipient shall contain the relevant provisions

authorizing to transfer contact information to the European Commission and/or a

contractor acting on behalf of the European Commission.

State Aid The Financial Instrument provided by the S&E Pilot is considered to be consistent

with State Aid rules.

Monitoring

and Audit

Financial Intermediaries and the relevant Final Recipients covered by the

Guarantee shall agree to allow and to provide access to documents and premises

(in the case of Financial Intermediaries) related to the relevant Guarantee for the

representatives of the European Commission, agents of the European Commission

(including the European Anti-Fraud Office (OLAF)), the European Court of

Auditors, European Public Prosecutor’s Office (EPPO), the EIF, agents of the EIF,

the EIB, any other European Union institution or European Union body which is

entitled to verify the use of the Guarantee in the context of the S&E Pilot and any

other duly authorized bodies under applicable law to carry out audit or control

activities. To that effect, the Financial Intermediaries shall also include appropriate

provisions in each agreement with Final Recipients.

Publicity Financial Intermediaries, in line with applicable laws, EC and the S&E Pilot

provisions, may carry out marketing and publicity campaigns - as specified in the

Guarantee Agreement - aimed at making the S&E Pilot known to the Final

Recipients in the relevant region/country.

In particular, the selected Financial Intermediary will be contractually required to:



Page 16 of 17

a) Ensure that the information and promotional material of the product clearly

point to the support provided by the EU through the European Fund For

Strategic Investments (EFSI);

b) Promote the products offered under the S&E Pilot through its website,

including concrete information on how/where to apply and contact points

for Final Recipients;

c) The Financial Intermediary shall include in the contractual documentation

with Final Recipients a text that highlights that “the finance provided to the

Final Recipient has been made possible through the support of the

European Union, under the European Fund For Strategic Investments”.

All documents concerning this Guarantee, including amongst others, applications,

Final Recipient Transaction agreements, promotional material, etc., will contain a

statement mentioning that the Final Recipient Transaction was made possible with

the support of the European Fund For Strategic Investments.

Additionally, the Financial Intermediary shall provide EIF upon request with case

studies of Final Recipients having benefited from a Final Recipient Transaction.

Transfer The Financial Intermediary shall not be entitled to transfer any or all of its rights

and obligations under the Guarantee without the consent of the EIF.

Record

keeping

The Financial Intermediary shall maintain or be able to produce all the

documentation related to the implementation of the Guarantee Agreement for a

period of five (5) years following the Termination Date of the Guarantee.

Additional

requirements

This Financial Instrument is funded by EU funds and it is therefore subject to certain

regulations and requirements, some of which have already been presented in this

document. It should be noted, however, that more detailed information on actions

necessary to ensure compliance of operations linked to this Financial Instrument

with all requirements will be provided to, and discussed with, the selected Financial

Intermediary during the contractual negotiations process.

Annex II to the Open Call for Expression of Interest to select Financial Intermediaries under the Skills & Education Guarantee Pilot

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Annex 1: NACE codes Section P-Education

Section P-Education

Division Group Class

85 Education

85.1 Pre-primary education

85.10 Pre-primary education

85.2 Primary education

85.20 Primary education

85.3 Secondary education

85.31 General secondary education

85.32 Technical and vocational secondary education

85.4 Higher education

85.41 Post-secondary non-tertiary education

85.42 Tertiary education

85.5 Other education

85.51 Sports and recreation education

85.52 Cultural education

85.53 Driving school activities

85.59 Other education n.e.c.

85.6 Educational support activities

85.60 Educational support activities

Documents

Annex II to the Open Call for Expression of Interest to ... · 2. Category B of Final Recipients: facilitating the skills transformation efforts pursued by the European enterprises